JDA® Software Group, Inc. (NASDAQ: JDAS),
The Supply Chain Company®, today announced financial results for
the third quarter ended September 30, 2010. JDA reported record
total revenues of $158.4 million, a 65 percent increase from $95.9
million of revenue reported in third quarter 2009. Software license
and subscription revenues in the third quarter 2010 increased 28
percent to $22.0 million from $17.3 million in third quarter
2009.
Adjusted EBITDA increased 69 percent to $39.7 million in third
quarter 2010 from $24.1 million in the third quarter of 2009. JDA
also reported adjusted non-GAAP earnings per share for third
quarter 2010 of $0.47, an increase from the $0.40 per share
reported in third quarter 2009. Adjusted non-GAAP earnings exclude
amortization of acquired software technology and intangibles,
restructuring charges, stock-based compensation and costs related
to the acquisition and transition of i2 Technologies, Inc. (i2).
GAAP net income attributable to common shareholders for third
quarter 2010 was $8.3 million or $0.20 per share, compared to a net
loss of $2.3 million or ($0.07) per share in third quarter 2009.
Results for 2010 include the completion of the acquisition of i2 as
of January 28, 2010.
“The integration of JDA with i2 is now well underway and there
are numerous indicators of the strength of the new combined
company, maintenance margins and retention rates are at an all time
high, operating expenses as a percent of revenue have improved
substantially, total revenue is running at record levels and
finally, despite being handicapped by unprecedented one-time legal
expenses, profits are at near-record levels,” said JDA President
and Chief Executive Officer Hamish Brewer. “Additionally,
although the software license revenue for the quarter was low, as
predicted, the outlook is strong and we expect to achieve the
higher end of our software revenue guidance range for the full
year.”
Software and Subscription
Software and subscription revenue increased 28 percent to $22.0
million in the third quarter 2010 from $17.3 million in the third
quarter 2009. This increase was driven by the acquisition of i2.
The average sales price for the trailing 12 months ended September
30, 2010 was $573,000 compared to $608,000 for the trailing 12
months ended June 30, 2010.
Maintenance and Support Services
Maintenance revenue increased 43 percent to $64.2 million in the
third quarter 2010 from $45.0 million in the third quarter 2009.
This increase was due to the acquisition of i2 and the
year-over-year improvement in retention rates. The year-to-date
retention rate in the third quarter 2010 increased to 95.9 percent
from 92.7 percent in the third quarter 2009. Maintenance gross
margins increased to 80 percent in the current quarter from 76
percent in the third quarter 2009 primarily due to the previously
suspended maintenance revenue of $4.0 million that was recognized
in the third quarter 2010.
Consulting Services
Consulting services revenue increased 114 percent to $65.9
million in the third quarter 2010 from $30.9 million in the third
quarter 2009. This increase was primarily due to the
acquisition of i2 and increased implementation services work
associated with larger JDA software product sales in
2009. During the third quarter 2010, the Company completed the
contractual and administrative requirements necessary to recognize
$7.6 million of consulting revenue and reimbursed expenses, along
with the associated costs related to work performed earlier in the
year. Consulting services gross margins were 23 percent in third
quarter 2010 compared to 26 percent in the third quarter
2009. This decrease was driven primarily by an increase in
contractor costs in the third quarter 2010 and a decrease in
utilization rates.
Other Financial Data
- Operating expenses as a percent of
revenue show the operating leverage effects of the i2 acquisition.
Product development expenses as a percent of revenue improved to 11
percent in the third quarter 2010 compared to 13 percent in the
third quarter 2009. Sales and marketing expenses as a percent of
revenue improved to 13 percent in the third quarter 2010 compared
to 17 percent in the third quarter 2009. General and administrative
expenses as a percent of revenue improved to 11 percent in the
third quarter 2010 compared to 13 percent in the third quarter
2009.
- Legal expenses incurred in third
quarter 2010 from inherited i2 litigation were $3.3 million,
primarily related to ongoing litigation related to the Dillard’s
and Oracle matters.
- DSO improved to 56 days at the end of
third quarter 2010 from 66 days at the end of second quarter 2010.
Compared to the third quarter in the prior year, DSO decreased from
57 days primarily due to continued focused collection efforts.
- Net interest and other expense for the
third quarter 2010 increased to $5.6 million from $0.7 million in
the third quarter of 2009 due to interest on the senior notes
issued in connection with the i2 acquisition and currency rate
changes.
- Cash flow provided by operations was
$29.4 million in third quarter 2010 compared to cash flow from
operations of $20.0 million in third quarter 2009. The largest
driver for the increase was a decrease in accounts receivable.
- Cash and cash equivalents, including
restricted cash, were $182.7 million at September 30, 2010,
compared to $363.8 million at December 31, 2009, which included net
proceeds from the issuance of $275.0 million of senior notes that
were used to complete the acquisition of i2 on January 28,
2010.
- Weighted average shares outstanding for
the quarter ended September 30, 2010 were 42.2 million.
Third Quarter 2010 Highlights
The following presents a high-level summary of JDA’s regional
sales performance:
- JDA reported $16.6 million in software
license and subscription revenues in its Americas region during
third quarter 2010, compared to $27.1 million in second quarter
2010 and $12.6 million in third quarter 2009. Customers that signed
new software licenses in third quarter 2010 include A&E
Television Networks, Caterpillar Logistics Services,
Inc., ConAgra Foods, Inc., Francesca’s
Collections and The Talbots, Inc.
- Software license and subscription
revenues in the Europe, Middle East and Africa (EMEA) region were
$3.4 million in third quarter 2010, compared to $4.8 million in
second quarter 2010 and $4.1 million in third quarter 2009.
Gruppo PAM S.p.A. is among the customers that signed new
software licenses in third quarter 2010.
- JDA’s Asia-Pacific region posted
software license and subscription revenues of $2.0 million in third
quarter 2010, compared to $6.1 million in second quarter 2010 and
$0.5 million in third quarter 2009. Wins in this region included
MediaTek, Qisda Corporation, Shanghai Hua Li
Microelectronics Co., Ltd. and Western Marketing
Corporation.
Nine Months Ended September 30, 2010 Results
- Revenue for the nine months ended
September 30, 2010 increased 61 percent to $448.4 million from
$278.7 million for the nine months ended September 30, 2009.
Adjusted EBITDA increased to $112.4 million for the first nine
months ended September 30, 2010 from $69.5 million in the first
nine months of 2009. The increases were primarily driven by the
acquisition of i2.
- Legal expenses incurred for the nine
months ended September 30, 2010 from inherited i2 litigation were
$6.3 million.
- Adjusted non-GAAP earnings per share
for the nine months ended September 30, 2010 was $1.34 compared to
$1.13 per share for the nine months ended September 30, 2009.
Adjusted non-GAAP earnings exclude amortization of acquired
software technology and intangibles, restructuring charges,
stock-based compensation and costs related to the acquisition and
transition of i2.
- The GAAP net income applicable to
common shareholders for the nine months ended September 30, 2010
was $11.9 million or $0.29 per share, compared to net income of
$9.2 million or $0.26 per share for the nine months ended September
30, 2009.
- Cash flow from operations was $39.0
million for the nine months ended September 30, 2010 compared to
cash flow from operations of $80.5 million for the nine months
ended September 30, 2009. The change in operating cash flow in the
current period was caused by realized deferred revenues from the i2
acquisition where the cash was collected prior to the acquisition
close date, an increase in receivables and deferred expenses and
payments related to acquisition accruals.
Conference Call Information
JDA Software Group, Inc. will host a conference call at 4:45
p.m. Eastern time today to discuss earnings results for its third
quarter ended September 30, 2010. To participate in the call, dial
1-877-941-4775 (United States) or 1-480-629-9761 (International)
and ask the operator for the “JDA Software Group, Inc. Third
Quarter 2010 Earnings Conference Call.” A live audio webcast of the
conference call and detailed slide deck can be accessed by logging
onto www.jda.com in the Investor Relations section.
A replay of the conference call will begin on October 26, 2010
at approximately 8 p.m. Eastern time and will end on November 26,
2010. To hear a replay of the call over the Internet, access JDA’s
website at www.jda.com.
About JDA Software Group, Inc.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain
Company®, is a leading global provider of innovative supply chain
management, merchandising and pricing excellence solutions. JDA
empowers more than 6,000 companies of all sizes to make optimal
decisions that improve profitability and achieve real results in
the discrete and process manufacturing, wholesale distribution,
transportation, retail and services industries. With an integrated
solutions offering that spans the entire supply chain from
materials to the consumer, JDA leverages the powerful heritage and
knowledge capital of acquired market leaders including i2
Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA’s
multiple service options provide customers with flexible
configurations, rapid time-to-value, lower total cost of ownership
and 24/7 functional and technical support and expertise. To learn
more, visit www.jda.com or e-mail info@jda.com.
JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share amounts,
unaudited)
September 30,2010
December 31,2009
ASSETS Current Assets:
Cash and cash equivalents
$ 172,370 $ 75,974 Restricted cash 10,321 287,875
Accounts receivable, net
98,287 68,883
Deferred tax asset
57,836 19,142
Prepaid expenses and other current
assets
32,643 15,667
Total current assets
371,457 467,541
Non-Current Assets:
Property and equipment, net
48,881 40,842
Goodwill
197,031 135,275
Other intangibles, net
199,200 119,661
Deferred tax asset
269,032 44,350
Other non-current assets
17,810 13,997
Total non-current assets
731,954 354,125
Total Assets
$
1,103,411 $
821,666
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
Liabilities:
Accounts payable
$ 19,017 $ 7,192
Accrued expenses and other liabilities
65,316 45,523 Income taxes payable 762 3,489
Deferred revenue
105,053 65,665
Total current liabilities
190,148 121,869
Non-Current Liabilities: Long-term debt 272,572 272,250
Accrued exit and disposal obligations 5,836 7,341 Liability for
uncertain tax positions 10,818 8,770 Deferred revenue
11,469 --
Total non-current liabilities
300,695 288,361
Total Liabilities
490,843 410,230
Stockholders' Equity:
Common stock
438 363
Additional paid-in capital
545,984 356,065
Retained earnings
85,885 74,014
Accumulated other comprehensive income
(loss)
7,000 3,267
Treasury stock
(26,739) (22,273)
Total stockholders' equity
612,568 411,436
Total liabilities and stockholders'
equity
$
1,103,411 $
821,666
JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(in thousands, except earnings per
share data, unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2010 2009 2010 2009
REVENUES: Software licenses $ 16,276 $ 16,354 $ 72,865 $
57,300 Subscriptions and other recurring revenues 5,758 896 15,851
2,860
Maintenance services
64,186 45,010
181,840 132,378
Product revenues
86,220 62,260
270,556 192,538
Consulting services
65,947 30,852 164,204 78,965
Reimbursed expenses
6,276 2,747
13,687 7,174
Service revenues
72,223 33,599
177,891 86,139
Total revenues
158,443 95,859
448,447 278,677 COST OF
REVENUES: Cost of software licenses 1,103 580 3,020 2,417
Amortization of acquired software technology 1,833 966 5,212 2,954
Cost of maintenance services
12,932
10,883 39,192
32,416
Cost of product revenues
15,868 12,429
47,424 37,787
Cost of consulting services
48,976 22,219 124,987 61,732
Reimbursed expenses
6,276 2,747
13,687 7,174
Cost of service revenues
55,252 24,966
138,674 68,906
Total cost of revenues
71,120 37,395
186,098 106,693 GROSS
PROFIT 87,323 58,464 262,349 171,984
OPERATING
EXPENSES: Product development 17,373 12,495 54,131 37,732
Sales and marketing
20,258 15,888 65,830 46,310
General and administrative
17,546 12,305 55,044 35,001
Amortization of intangibles
9,966 5,753 28,447 17,880
Restructuring charges
4,172 2,543 16,478 6,705 Acquisition-related costs
473 -- 8,081
--
Total operating expenses
69,788 48,984
228,011 143,628
OPERATING INCOME
17,535 9,480 34,338 28,356 Interest expense and amortization
of loan fees (6,169) (346) (18,437) (971)
Interest income and other, net
558 1,006
1,039 886 INCOME BEFORE
INCOME TAXES 11,924 10,140 16,940 28,271
Income tax provision
3,651 3,877
5,069 10,429
NET INCOME
$
8,273 $
6,263 $
11,871 $
17,842
Consideration paid in excess of carrying
value on the repurchase of redeemable preferred stock
--
(8,593)
--
(8,593)
INCOME APPLICABLE TO COMMON
SHAREHOLDERS
$
8,273
$
(2,330)
$
11,871
$
9,249
EARNINGS PER SHARE APPLICABLE TO COMMON
SHAREHOLDERS:
Basic earnings per share
$
.20 $
(.07) $
.29 $
.26
Diluted earnings per share
$
.20 $
(.07) $
.29 $
.26 SHARES USED TO COMPUTE
Basic earnings per share
41,774 33,505
40,939 35,076
Diluted earnings per share
42,234 33,505
41,517 35,329
JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands, unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2010 2009 2010
2009
CASH FLOW
INFORMATION
Net cash provided by (used in) operating activities: Net
Income $ 8,273 $ 6,263 $ 11,871 $ 17,842 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 15,019 9,201 43,029 28,043 Provision
for doubtful accounts 499 600 999 900 Amortization of loan fees 490
-- 1,412 -- Share-based compensation expense 2,265 2,845 8,834
6,412 Net loss (gain) on disposal of property and equipment 1 (1)
(8) (55) Deferred income taxes 183 2,847 (121) 8,517 Changes in
assets and liabilities, net of effects from business acquisitions:
Accounts receivable 16,137 2,716 1,281 19,536 Income tax receivable
194 (404) 2,225 (1,838) Prepaid expenses and other current assets
963 2,906 (12,948) (3,976) Accounts payable 5,176 (1,454) 8,810
5,685 Accrued expenses and other liabilities (1,762) 2,032 (15,837)
(11,478) Income tax payable (1,690) 15 (5,427) 380 Deferred revenue
(16,323) (7,547)
(5,127) 10,560 $
29,425 $
20,019 $
38,993 $
80,528 Net cash provided by (used in) investing
activities: Change in restricted cash $ 1,459 $ -- $ 277,554 $ --
Purchase of i2 Technologies, Inc -- -- (213,427) -- Payment of
direct costs related to acquisitions (1,110) (2,945) (2,749)
(4,431) Purchase of other property and equipment (8,388) (4,134)
(14,785) (5,541) Proceeds from disposal of property and equipment
282 8
631 62 $
(7,757) $
(7,071) $
47,224 $
(9,910)
Net cash provided by financing activities: Issuance of
common stock under equity plans $ 2,226 $ 9,882 $ 13,836 $ 14,524
Purchase of treasury stock and other, net (887) (2,367) (4,645)
(6,266) Redemption of redeemable preferred stock
-- (28,068) --
(28,068) $
1,339 $
(20,553) $
9,191 $
(19,810)
Effect of exchange rates on cash
3,184
407 988
1,973 Net increase (decrease) in cash and cash
equivalents 26,191 (7,198) 96,396 52,781 CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
146,179
92,675 75,974
32,696 CASH AND CASH EQUIVALENTS, END OF PERIOD $
172,370 $
85,477 $
172,370 $
85,477
JDA SOFTWARE GROUP, INC.
NON-GAAP MEASURES OF
PERFORMANCE
(in thousands, except share data,
unaudited)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2010 2009 2010
2009
Reconciliation of
GAAP Net Income to EBITDA and Adjusted EBITDA
Net Income (GAAP BASIS) $ 8,273 $ 6,263 $ 11,871 $
17,842 Income tax provision 3,651 3,877 5,069 10,429 Interest
expense and amortization of loan fees 6,169 346 18,437 971
Amortization of acquired software technology 1,833 966 5,212 2,954
Amortization of intangibles 9,966 5,753 28,447 17,880 Depreciation
3,218 2,482
9,368 7,209 EBITDA (earnings
before interest, tax, depreciation and amortization) 33,110
19,687 78,404 57,285 Restructuring charges 4,172 2,543 16,478 6,705
Stock-based compensation 2,265 2,845 8,834 6,412
Acquisition-related costs 473 -- 8,081 -- Non-recurring transition
costs to integrate acquisition 198 -- 1,638 -- Interest income and
other non-operating income, net
(558)
(1,006) (1,039)
(886) Adjusted EBITDA $
39,660 $
24,069 $
112,396 $
69,516
EBITDA, as a percentage of revenue
21% 21% 17%
21% Adjusted EBITDA, as a percentage
of revenue 25% 25%
25% 25%
NON-GAAP EARNINGS
PER SHARE
Income before income taxes (GAAP BASIS) $ 11,924 $
10,140 $ 16,940 $ 28,271 Amortization of acquired software
technology 1,833 966 5,212 2,954 Amortization of intangibles 9,966
5,753 28,447 17,880 Restructuring charges 4,172 2,543 16,478 6,705
Stock-based compensation 2,265 2,845 8,834 6,412
Acquisition-related costs 473 -- 8,081 -- Non-recurring transition
costs to integrate acquisition
198
-- 1,638 --
Adjusted income before income taxes 30,831 22,247 85,630
62,222 Adjusted income tax expense
10,791
8,009 29,971
22,261 Adjusted net income $
20,040 $
14,238 $
55,659 $
39,961 Adjusted non-GAAP diluted earnings per
share $
0.47 $
0.40 $
1.34 $
1.13 Shares used to compute
non-GAAP diluted earnings per share 42,234
35,678 41,517
35,329 JDA SOFTWARE GROUP, INC.
SUPPLEMENTAL DATA (dollars in thousands)
Software & Subscription Revenues
by Geographic Region
Three Months Ended
9/30/2010 6/30/2010 3/31/2010
12/31/2009 9/30/2009 Americas $ 16,590 $ 27,080 $
18,917 $ 19,084 $ 12,624 EMEA 3,405 4,773 5,403 6,417 4,084
Asia/Pacific 2,039 6,105 4,404 3,125 542 Total $ 22,034 $ 37,958 $
28,724 $ 28,626 $ 17,250
Business
Segment Data Three Months Ended 9/30/2010
6/30/2010 3/31/2010 12/31/2009
9/30/2009 Supply Chain Total Revenues $ 153,706 $
152,931 $ 125,233 $ 99,410 $ 88,608 Operating Income 50,435 52,638
39,904 33,882 29,054 Operating Income Margin 33% 34% 32% 34% 33%
Pricing and Revenue Management Total Revenues $ 4,737
$ 5,442 $ 6,398 $ 7,713 $ 7,251 Operating Income (Loss) (743) (453)
607 986 1,027 Operating Income Margin (16%) (8%) 9% 13% 14%
New vs. Install-Base Software Sales and
Subscription Revenues Three Months Ended
9/30/2010 6/30/2010 3/31/2010
12/31/2009 9/30/2009 New Sales $ 2,603 12% $ 8,080
21% $ 8,415 29% $ 4,515 16% $ 3,317 19% Install-Base Sales 19,431
88% 29,878 79% 20,309 71% 24,111 84% 13,933 81% Total $ 22,034 $
37,958 $ 28,724 $ 28,626 $ 17,250
ASP, Multi-Product Deals & Large Deal Counts
Last Twelve Months Ended 9/30/2010 6/30/2010
3/31/2010 12/31/2009 9/30/2010 Average Sales
Price (ASP) $ 573 $ 608 $ 618 $ 630 $ 733 Multiple-Product Deals 17
18 21 20 19
Large Deal Count (>= $1 million)
25 25 24 19 16
Quota Carrying Sales Representatives
98 92 96 75 75
Summary
of Revenue Contribution in Third Quarter 2010
JDA i2 Combined Software and
Subscription Revenues $ 9,629 44% $ 12,405 56% $ 22,034 Maintenance
Revenues 46,518 72% 17,668 28% 64,186 Product
Revenues 56,147 65% 30,073 35% 86,220 Service Revenues
38,374 53% 33,849 47% 72,223 Total
Revenues $ 94,521 60% $ 63,922 40% $ 158,433
Summary of Revenue Contribution in First Nine
Months of 2010 JDA i2 Combined
Software and Subscription Revenues $ 47,235 53% $ 41,481 47%
$ 88,716 Maintenance Revenues 138,426 76% 43,414 24%
181,840 Product Revenues 185,661 69% 84,895 31% 270,556
Service Revenues 108,669 61% 69,222 39%
177,891 Total Revenues $ 294,330 66% $ 154,117 34% $ 448,447
“Safe Harbor” Statement under the U.S. Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements that are
made in reliance upon the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are generally accompanied by words such as “will,” and
“expect” and other words with forward-looking connotations. In this
press release, such forward-looking statements include, without
limitation, Mr. Brewer’s statement that the software license
outlook is strong and we expect to achieve the higher end of our
software revenue guidance range for the full year. We remind our
investors and prospective investors that future events may involve
risks and uncertainties. Risks and uncertainties that may affect
our business are detailed from time to time in the “Risk Factors”
section and other sections of our filings with the Securities and
Exchange Commission. As a result of these and other risks, actual
results may differ materially from those predicted. We undertake no
obligation to update information in this release, except as
required by law.
Use of Non-GAAP Financial Information
This press release and the related conference call contain
non-GAAP financial measures. In evaluating the Company’s
performance, management uses certain non-GAAP financial measures to
supplement consolidated financial statements prepared under GAAP.
Management’s presentation of non-GAAP financial measures is
intended to be supplemental in nature and should not be considered
in isolation or as a substitute for the most directly comparable
GAAP measures.
Use and Economic Substance of Non-GAAP Financial Measures
Used by JDA
The Company uses non-GAAP measures of performance, including
adjusted net income, EBITDA (earnings before interest, taxes,
depreciation and amortization) and earnings per share, in its
public statements. Management uses, and chooses to disclose, these
non-GAAP financial measures because (i) such measures provide an
additional analytical tool to clarify the Company’s results from
operations and help the Company to identify underlying trends in
its results of operations; (ii) the Company uses non-GAAP earnings
measures, including EBITDA, as a measure of profitability because
such measures help the Company compare its performance on a
consistent basis across time periods; and (iii) these non-GAAP
measures are employed by the Company’s management in its own
evaluation of performance and are utilized in financial and
operational decision making processes, such as budget planning and
forecasting. The Company also internally uses adjusted EBITDA
measures for determining (a) compliance with certain financial
covenants in its credit agreement and (b) executive and employee
compensation. Set forth below are additional reasons why specific
items are excluded from the Company’s non-GAAP financial
measures:
- Amortization charges for acquired
software technology are excluded because they result from prior
acquisitions, rather than ongoing operations, and absent additional
acquisitions, are expected to decline over time.
- Amortization charges for other
intangibles are excluded because they are non-cash expenses, and
while tangible and intangible assets support our business, we do
not believe the related amortization costs are directly
attributable to the operating performance of our business.
- Restructuring charges are significant
non-routine expenses that cannot be predicted and typically relate
to a change in our business model or to a change in our estimate of
the costs to complete a plan to exit an activity of an acquired
company. The exclusion of these charges promotes period-to-period
comparisons and transparency. Such charges are primarily related to
severance costs and/or the disposition of excess facilities driven
by the changes to our business model.
- Stock-based compensation is not an
expense that typically requires or will require cash settlement by
the Company.
- Acquisition-related costs associated
with the acquisition of i2 and the non-recurring transition costs
to integrate the acquisition are significant non-routine expenses.
Exclusion of these costs promotes period-to-period comparisons and
transparency as we do not believe these costs are directly
attributable to the operating performance of our business.
Material Limitations (and Compensation thereof) Associated
with the Use of Non-GAAP Financial Measures
Non-GAAP financial measures have limitations as an analytical
tool and should not be considered in isolation or as a substitute
for the Company’s GAAP results. In the future, the Company expects
to continue reporting non-GAAP financial measures excluding items
described above and the Company expects to continue to incur
expenses similar to the non-GAAP adjustments described above.
Accordingly, exclusion of these and other similar items in our
non-GAAP presentation should not be construed as an inference that
these costs are unusual, infrequent or non-recurring.
Some of the limitations in relying on non-GAAP financial
measures are:
- Amortization of acquired technology and
intangibles, though not directly affecting our current cash
position, represent the loss in value as the technology in our
industry evolves, is advanced or is replaced over time. The expense
associated with this loss in value is not included in the non-GAAP
net income presentation and therefore does not reflect the full
economic effect of the ongoing cost of maintaining our current
technological position in our competitive industry which is
addressed through our research and development program.
- The Company may engage in acquisition
transactions in the future. In addition, we incur other
restructuring charges from time to time when necessary to adjust
our business model. Restructuring related charges may therefore
continue to be incurred and should not be viewed as
non-recurring.
- Stock-based compensation is an
important component of our incentive compensation arrangements and
will be reflected as expenses in our GAAP results for the
foreseeable future.
- Other companies, including other
companies in our industry, may calculate non-GAAP financial
measures differently than we do, limiting their usefulness as a
comparative measure.
We compensate for these limitations by relying primarily on our
GAAP results and using non-GAAP financial measures only
supplementally. We also provide reconciliations of each non-GAAP
financial measure to our most directly comparable GAAP measure, and
we encourage investors to review carefully those
reconciliations.
Usefulness of Non-GAAP Financial Measures to
Investors
The Company believes that the presentation of these non-GAAP
financial measures is warranted for several reasons. First, such
non-GAAP financial measures provide investors and management an
additional analytical tool for understanding the Company’s
financial performance by excluding the impact of items which may
obscure trends in the core operating performance of the business.
Second, since the Company has historically reported non-GAAP
results to the investment community, the Company believes the
inclusion of non-GAAP numbers provides consistency and enhances
investors’ ability to compare the Company’s performance across
financial reporting periods.
Jda (NASDAQ:JDAS)
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Jda (NASDAQ:JDAS)
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From Jul 2023 to Jul 2024